Some Hard Truths: Profit, Pharma, and Your Healthcare

I promise that after this, no more semi-political posts.

I read today that our president-elect plans to “negotiate with pharmaceutical companies to get the best price.” Not a bad idea, although I’m not sure how exactly that is going to work in practice.

Here’s a fact, though: Only about 10% of the national healthcare dollar went to prescription drugs. In contrast, 33% went toward hospital care (in 2013, the latest data I could find offhand). With all the hype about drug prices, I bet you didn’t know that.

So if we want to reduce healthcare spending, the way to do it is to keep people out of the goddamn hospital in the first place. In other words, if DJT really wanted to cut costs, he’d launch a massive preventative healthcare initiative. Not negotiate the 9% spent on prescription drugs to 7% or whatever.

Anyway, I know everyone beats up on pharmaceutical companies for drug prices–and there are certainly a few egregious examples of some pretty shady practices. But that’s not what I’m going to talk about right now.

With that out of the way: Let’s face a few facts: The pharma industry, like any other industry, is driven by profit. But wait, you say, healthcare shouldn’t be driven by profit!

In an ideal world, that would be true. But without the profit motive, do you think you are going to get new, lifesaving treatments? If you think scientists at academic centers are spending their time developing new cancer treatments, you are (by and large) wrong. Basic science in the academic setting is exactly that: basic, fundamental work that in many cases has no application to human health, and in other cases won’t have an application for decades to come. It is absolutely necessary to lay foundations, but it rarely produces immediate benefits.

Let’s look at what happened in a specific therapeutic area when the profit motive disappeared. Hypertension. You know, high blood pressure. Almost everyone will have some degree of hypertension as they get older, and most of these people will require medications.

People tend to think of antihypertensives as relatively benign drugs, because a huge proportion of people, especially older people, are taking them. But here’s a sad fact: most of them have fairly significant side effects, and none are particularly effective. In fact, many (if not most) people ultimately require a stew of different medications to get blood pressure fully under control.

Up until about 2010, there was massive research and development into new antihypertensive medications. What happened around then, plus or minus 5 years? A bunch of widely used antihypertensives went off patent. Now they’re available for pennies per pill, instead of substantially more.

Okay, you say, that’s great! Cheap medications! But you know what else happened? The pace of development of new antihypertensives came to close to a standstill, at least relative to the pace before the profit motive mostly disappeared.

The end result? You’re going to be taking the same crappy, ineffective antihypertensives your parents or grandparents are taking right now. Maybe there will be a few new, better drugs. But if you were running a pharmaceutical company, would you spend hundreds of millions to develop a new antihypertensive, put it through clinical trials, and then release it into a market that has hundreds of drugs available for pennies a pill? Probably not.

Hope you enjoy your chlorthalidone and hydrochlorothiazide!

Now, back to my post on Trainer Road, which I’m sure is far more interesting on a bicycle blog!



3 thoughts on “Some Hard Truths: Profit, Pharma, and Your Healthcare

  1. bgddyjim

    I decided to invest $10,000 in bicycles and skip the high blood pressure medication altogether… The last intake nurse I dealt with couldn’t believe I don’t take any regular medications at my age. I told her 6,000 miles a year fixes a lot of what ails ya.

    As for the medication, who said Trump was only going to focus on costly medication? I guarantee you he didn’t. I’m pretty sure he can go after a bunch of different things (including burning Obamacare – though that might piss off the global warmanists).

  2. Archetype

    Before I delve into the subject matter…let me just state that I do agree and do believe Preventive Medicine, or Preventive Care (by individuals and doctors) is the BEST action we can take as a society. maintaining a healthy or relatively healthy lifestyle is our best defense against health issues (barring genetics and hereditary problems) A relatively clean diet, regular cardio exercise and sufficient sleep are all core keys to being what we deem as ‘healthy’
    But now, I somewhat digress…

    Well John, there is profit driven, profit motivated and then there is unbridled greed. Nothing wrong with real, true capitalism. I happen to think that true capitalism affords the masses all the basics and then some. BUT, unfortunately, we do not have capitalism on any macro level in the US. We haven;t for a long long time wither. What we DO have is Corporatism. Corporatism is ANTI capitalist it is anti freedom as well. Corporatism can ONLY exist in anything less than a TRUE democracy. Not the sham of our so-called phony ‘representative’ democracy, which is a real joke. Without true liberty and freedom (AND choice- which is the absolute crux of liberty and freedom) a society cannot have true capitalism.

    The massive collusion between State and Mega Private industry (especially Big Pharma) The profit margins are such that executives are making hundreds of millions in salaries and bonuses while a good portion of folks go without medical or HC necessities. This gap is also prevalent in our society as a whole in general.

    Let me be blunt.
    The Pharma cartel is one of the most powerful lobbyists in DC. They are corrupt and commit fraud without any harsh or severe consequences. Some fines here and there and that’s it. They buy and sell’ prostitutes’ in the FDA and in our government.

    DJT is just another POS in the Corrupted Criminal enterprise known as government. And he isn’t going to change anything. Just as obama created an insurance system that constantly increases cost to most middle and lower-middle income classes while making the insurance banksters and pharma execs filthy rich. The government has zero interest in helping the masses and ALL the interest in providing unlimited monies to their cronies- (Energy, pharma, and bank cartels) I’ll point to you to many pieces of ‘hard truths on profits…and investigative information on the subject… this is just a sampling of many, many topics and investigations on the absolute unacceptable behavior and actions of big pharma.

    [Please note: I have removed the links to YouTube videos that were provided. YouTube is not a legitimate news source.]

    1. John Ferguson Post author

      You are tarring an entire industry that sells literally thousands of different life-saving drugs and employs hundreds of thousands of people with a few instances of egregious behavior. I don’t deny or discount these issues, but the fact of the matter is that they are isolated, extremely rare, and–in general–heavily punished. Billion-dollar fines, anyone? The reason it seems like ethical overstepping is common is because that’s what is heavily publicized.

      I’m not saying the pharma industry is pure and perfect. It’s not. There are sociopaths in every industry and every profession. But there are hundreds of thousands of good people employed by the pharma industry who believe that they are advancing the cause of human health.

      Contrast with the financial industry that stole (and continues to steal) hundreds of billions from everyday people and goes completely unpunished. This is an industry that, by and large, has become nothing more than a parasite sucking blood from the body politic.

      Instead of complaining about the cost of drugs, if you have a solution that encourages the development of new medications that does not involve the potential to profit, please let me know. Keep in mind when you’re formulating your response that the average cost to bring a new drug to market is $2.5 billion (ref:

      Finally, you shouldn’t get your news from YouTube.


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